AM Best Affirms Credit Ratings of Central Reinsurance Corporation

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Central Reinsurance Corporation (Central Re) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Central Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.

Central Re’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level at year-end 2025. The company’s adjusted capital and surplus (C&S) grew through 2025 and into the first quarter of 2026, owing to the partial retention of operating profits. AM Best expects Central Re’s risk-adjusted capitalisation to remain robust to support a controlled pace of growth in its underwriting and investment risks over the short to intermediate term. Other supportive factors of the balance sheet strength include the company’s prudent investment strategy, strong liquidity and comprehensive retrocession arrangement.

Central Re has recorded consistent profitability, evidenced by a five-year return-on-equity ratio, based on adjusted C&S, of 8.8% from 2021 to 2025. As the sole domestic reinsurer in Taiwan with a long operating history, Central Re continues to benefit from solid and long-term relationships with local cedants, maintaining a market-leading role in both the domestic non-life and life reinsurance segments. The domestic non-life business makes up two-thirds of its underwriting portfolio, with premium revenue remaining broadly flat in 2025. The company continues to focus on the non-life personal lines segment and remains selective on catastrophe-related large commercial risks, while maintaining a positive underwriting margin. The company’s domestic life business continues to expand and deliver a solid stream of earnings and supports its overall underwriting result. AM Best anticipates that Central Re’s domestic market leadership will remain unchallenged over the medium term.

The company has reined in the growth pace of its overseas business over the past few years, which constituted less than one-fifth of its total premiums written in 2025, while underwriting margins increased due to an improved loss ratio. AM Best expects Central Re to uphold its prudent underwriting approach and strive for sustainable profitability, and over the intermediate term, benefit from the enhanced diversification in both its geography and clientele.

AM Best views Central Re’s investment strategy as prudent, with the majority of its assets allocated to diversified and liquid securities, comprising mainly cash and investment-grade bonds. The company actively fine-tunes its asset allocation in response to the prevailing capital market and interest rate environment. Investment results benefit from favourable capital gains, and stable investment income from fixed-income assets and dividend income, while fluctuations in currency exchange rates have added volatility to investment results over the past few years.

Negative rating actions could arise if Central Re’s business profile exhibits a sustained diminishing trend that materially deviates from its indicated plans and weakens its competitive position in the domestic market. Negative rating actions also could occur if there is a significant decline in the company’s risk-adjusted capitalisation. Positive rating actions could occur if Central Re’s domestic and overseas underwriting portfolios demonstrate sustained and favourable results to strengthen its overall operating performance, while supporting its current business profile.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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